Bill Text: MI HB5650 | 2013-2014 | 97th Legislature | Introduced
Bill Title: Local government; bonds; liens on certain tax pledges; modify. Amends sec. 701 of 2001 PA 34 (MCL 141.2701).
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2014-06-12 - Printed Bill Filed 06/12/2014 [HB5650 Detail]
Download: Michigan-2013-HB5650-Introduced.html
HOUSE BILL No. 5650
June 11, 2014, Introduced by Rep. Shirkey and referred to the Committee on Financial Liability Reform.
A bill to amend 2001 PA 34, entitled
"Revised municipal finance act,"
by amending section 701 (MCL 141.2701), as amended by 2002 PA 500.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 701. (1) Subject to subsection (3), if a municipality has
municipal securities outstanding, or with the approval of its
electors has authorized the issuance of municipal securities to be
paid from collections of its next tax levy, an officer or official
body charged with a duty in connection with the determination of
the amount of the next taxes to be raised or with the levying of
the next taxes, shall include all of the following in the amount of
taxes levied each year:
(a) An amount such that the estimated collections will be
sufficient to promptly pay, when due, the interest on all municipal
securities and the portion of the principal falling due whether by
maturity or by mandatory redemption before the time of the
following year's tax collection.
(b) An amount, if there are outstanding mandatory redemption
refunding securities, sufficient to provide the sum required to be
deposited, by the ordinance or resolution authorizing the issue,
into the sinking fund for that purpose before the time of the
following year's tax collection.
(c) An amount, if there are outstanding mandatory redemption
municipal securities other than refunding securities not required
to be redeemed in annual amounts before the maturity of the
outstanding mandatory redemption municipal securities, that if
deposited annually into a sinking fund will, with the existing
sinking fund pertaining to the municipal securities and the
increment of the municipal securities, be sufficient to pay the
municipal securities at maturity.
(d) An amount necessary to pay debt service charges or
obligations on municipal securities or agreements described in
section 317(5) falling due in the immediately preceding fiscal
year, to the extent that the tax levy in the preceding fiscal year
was inadequate to pay, when due, the debt service charges or
obligations on municipal securities or agreements described in
section 317(5). The municipality shall do 1 or more of the
following with the proceeds of the tax levy:
(i) Deposit in the debt retirement fund established for the
municipal securities and used to pay debt service charges or
obligations on municipal securities or agreements described in
section 317(5).
(ii) Use to pay debt service on short-term municipal securities
issued under section 403(5).
(iii) Use to reimburse the municipality for any advances of
funds used for the purposes described in subparagraph (i) or (ii).
(2) Subsection (1) does not limit the amount required to be
levied in a year for the purposes prescribed in that subsection, by
the terms of an ordinance or resolution authorizing the issuance of
the municipal securities.
(3) If the municipal securities were authorized or issued
before December 23, 1978, or were approved by the electors of a
municipality, the municipality shall levy the full amount of taxes
required by this section for the payment of the municipal
securities without limitation as to rate or amount and in addition
to other taxes that the municipality may be authorized to levy, and
an unlimited tax pledge by that municipality described in the
unlimited tax election act, 1979 PA 189, MCL 141.161 to 141.168,
shall constitute, without the requirement of further action or
agreement, a statutory first lien on all taxes subject to the
unlimited tax pledge. This subsection applies to an unlimited tax
pledge made prior to or after the date of enactment of the
amendatory act that added this sentence. If the municipal
securities were authorized or issued by a municipality after
December 22, 1978, and were not approved by the electors of the
municipality, the municipality shall set aside each year from the
levy and collection of ad valorem taxes as required by this section
as a first budget obligation for the payment of the municipal
securities. However, the ad valorem taxes shall be subject to
applicable charter, statutory, or constitutional rate limitations.
(4) If there is surplus money on hand for the payment of
principal or interest at the time of making an annual tax levy, and
provision has not been made in the authorizing resolution for the
disposition of that money, the annual levy for principal or
interest shall be adjusted to reflect available funds.
(5) Money remaining in a debt retirement fund from the levy of
a tax or an account within a debt retirement fund from the levy of
a tax after the retirement of all municipal securities payable from
that fund shall be used in the following order of priority:
(a) To pay other outstanding unlimited tax full faith and
credit municipal securities.
(b) To pay other outstanding limited tax full faith and credit
municipal securities.
(c) To be deposited in the general fund of the municipality.
(6) As taxes are collected, there shall be set aside that
portion of the collections that is allocable to the payment of the
principal and interest on the municipal securities. The portion set
aside shall be held in trust for the owners of the municipal
securities and divided pro rata among the various sinking funds and
debt retirement funds in accordance with the amount levied for that
purpose. Tax collections paid into a debt retirement fund, if the
fund is for the payment of more than 1 issue of municipal
securities, shall be allocated on the books and records of the
municipality between the various issues in accordance with the
amounts levied for that purpose.
(7) An officer who willfully fails to perform duties required
by this section is personally liable to the municipality or to a
holder of a municipal security for loss or damage arising from his
or her failure.
(8) As used in this section, "tax levy" includes special
assessments.
